Business confidence slips in Vietnam

Grant Thornton’s International Business Report 2012 revealed that business confidence in Vietnam  was lower.

Despite huge uncertainty in the global economy, many ASEAN businesses are far from reluctant to invest in the future growth of their operations.

Some 24 per cent expect to increase investment in new buildings over the next 12 months, and 39 per cent are planning to increase investment in plant and machinery, both above the global average.

A further 28 per cent plan to increase research and development (R&D) spending, although this is well below the APAC (excluding Japan) figure of 50 per cent.

Within ASEAN, 34 per cent of businesses in Thailand are planning investment in R&D over the next 12 months, followed by Vietnam (32 per cent) and the Philippines (30 per cent).

A lack of skilled workers is the key constraint on growth for businesses in the ASEAN region, cited by 43 per cent of businesses. It is also cited as a major constraint by businesses in the wider APAC (excluding Japan) region (37 per cent), well above the global average (28 per cent).

 This lack of talent is a particular problem for businesses in Singapore (53 per cent), Malaysia and Vietnam (46 per cent).

The cost of finance is also cited as a major growth constraint by ASEAN businesses (32 per cent), led by Vietnam (50 per cent).

In Vietnam, the slowdown in global trade is a particular concern.   A shortage in orders and reduced demand emerges are the top constraints (50 per cent).

Businesses in Vietnam are the most positive about seeing revenues rise (86 per cent) and those in the Philippines the least (44 per cent) although of low business confidence index.

As a result, 78 per cent expect to see profitability increase compared with the ASEAN average of 42 per cent.